If the U.S.dollar depreciates in the foreign exchange market,American exports will _____ and American imports will _____.

Question

Quizplus · Accepted Answer

If the U.S. dollar depreciates, it means that it is worth less in comparison to other currencies. This makes American exports cheaper for foreign buyers, which will increase demand for American goods and result in an increase in exports. On the other hand, American imports become more expensive for domestic buyers, which will decrease demand for foreign goods and result in a decrease in imports. Therefore, American exports will be less expensive and American imports will be more expensive.

If the USDollar Depreciates in the Foreign Exchange Market,American Exports Will _____